Area business leaders take message to Washington

July 19, 2011|By JEFF REA

Last week I had a chance to visit Capitol Hill with a group of 30 business leaders from northern Indiana and southwest lower Michigan. We descended upon Washington with the goal of educating federal elected officials about the top strategic priorities for this region, getting an update on current activity going on in Congress and sharing stories of the direct effect the actions coming out of Washington have on the operation of our local businesses.

We wanted to emphasize to Congress that we are concerned with the future success of business in our region and want to ensure that we remain competitive in the current economic environment.

While in Washington, I was sitting in the chambers of the U.S. Senate and just happened to glance up at the bust of South Bend native son Schuyler Colfax on prominent display for all to see. Colfax served the U.S. House of Representatives from 1855-1869, was speaker of the House from 1863-1869 and vice president of the United States under President Ulysses S. Grant from 1869-1873. I couldn't help but wonder what Colfax would think about our current state of affairs in our nation's capital and the work of his brothers and sisters in the House and Senate.

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The national debt and the budget dominated much of the conversation and filled most of the news stories coming out of the capital with a big showdown looming and a deadline of Aug. 2 for a solution to avoid a potential government shutdown. It was on everyone's mind with a lot of uncertainty about how to fix it and whether Congress and the president could come together with an appropriate solution. To us it seems simple, don't spend more money than you take in. We know it's more complicated than that. After hearing about it for two days, I didn't come away encouraged by what I had heard. Additional conversations about health care, transportation, energy and environmental issues were also not encouraging.

Top on the minds of our business leaders was the onslaught of new regulations related to health care, financial reform, and the EPA, together with existing regulations that have already made it very complicated and costly to do business in the U.S. This onslaught of new regulations will cost hundreds of billions of dollars, slow down our economic recovery, undermine our competitiveness and cost jobs.

Today, there are currently about 180,000 regulations on the books, costing Americans more than $1.7 trillion annually in compliance costs. I believe the business community understands the need for many of these regulations, but struggles to understand why the regulations need to be so complicated and far-reaching.

Of greater concern is the impact these rules have on small business. Studies show that as the cost of federal regulations continues to grow, these costs disproportionately hit small business. Per employee cost of compliance is nearly 60 percent higher for small businesses than it is for their larger counterparts. A September 2010 report found that of that $1.7 trillion in compliance costs, the tab for small businesses was $10,585 per employee, or 36 percent more than large businesses paid.

According to the SBA report, the majority of the regulatory costs stem from rules that govern trade, labor and antitrust issues, taxes, workplace safety, homeland security and the environment. An overburdened regulatory environment will slow economic recovery at a time when we are all anxious for our economy to grow. As small business owners struggle to keep up with the rising cost of the ever changing regulatory environment, they are slow to invest in new equipment and employees. This should be of great concern to all of us, as a majority of the job growth in the U.S. over the last decade has been in these small businesses. If they are not growing, our economic recovery will continue to be slow.

Sens. Dan Coats and Richard Lugar and U.S. Reps. Joe Donnelly and Marlin Stutzman were receptive to our message and very kind with their time as they worked to better understand our concerns. In the end, we tried to leave them with the message that what we believe our local business community and citizens really want is a system that protects our citizens while spurring economic growth and jobs by being smarter, less intrusive and more accountable.

Jeff Rea is president and CEO of the Chamber of Commerce of St. Joseph County.